Recovery Watch: Credit card mail has increased dramatically

A lot of people discover a mailbox filled with credit card offers unappealing, however look at the bright side: It’s a sign the squeeze on customer credit may be loosening. Bankrate reports that the consumer credit industry has experienced a kind of renaissance when it comes to charge card mail offers. Media monitoring business Mintel Comperemedia found in a recent study that charge card mail offers almost tripled in the U.S. from Q4 2009 (551 million pieces of mail) to Q4 2010 (1.4 billion). Source of article – Recovery Watch: Credit card mail has increased dramatically by MoneyBlogNewz.

Credit standing out in the sea of offers

No foreign transaction charges, no transfer charges, and low introductory charges; all contribute to the growing benefits of charge cards. Waiving balance transfer fees is particularly popular. Senior V.P. Andrew Davidson of Mintel told CreditCards.com that banks will do almost anything to grab the competitive advantage. In 2010, a study showed that around 40 banks offering credit completely cancelled their transfer fees, and those who did keep them only kept the fee around 3.06%.

Working to be your intercontinental champion

The foreign arena or currency conversion charges are a large competitive area for credit card issuers. While not as visible as Annual Percentage Rate, annual fees and balance transfer charges, foreign transaction charges are important to everyone who travels, whether for pleasure or business. Most cards add a 3 percent surcharge for each foreign transaction, a tax that can add up easily. Past year a study conducted showed that over 90 percent of bank cards consist of this type of fee.

Chase, Citibank, HSBC and others currently waive foreign transaction charges on several of their cards, said Mintel.

Customers like extended introductory rates

Perhaps probably the most hotly contested area in the credit card mail wars is the extended introductory rate. A low initial APR for balance transfers and purchases is appealing to consumers, and some charge card issuers even dangle a zero-percent APR.

Mintel reported the introductory rate was around 13 months for the fourth quarter of 2010. According to Davidson, that number is expected to grow.

“The squeeze on credit observed during mid-2009 is being reversed, and many issuers are now offering durations of 15, 17 or 18 months or more,” he told Bankrate. “We have even seen offers with 24- and 30-month intro rate durations in recent months.”

Rates of interest are low due to Credit card regulations

The Credit Card Accountability, Responsibility and Disclosure Act (CARD) have helped stabilize credit card APRs. 14.03 percent was the average Annual Percentage Rate in the fourth quarter of 2010, according to Mintel. “Many credit card companies have contrasted their APRs against the relatively high prime rate as a consumer draw,” said Davidson.

Citations

Bankrate

bankrate.com/financing/credit-cards/4-trends-in-credit-card-mail/

CreditCards.com

creditcards.com/credit-card-news/foreign-exchange-fees-going-up-1267.php

Pew Trusts

pewtrusts.org/uploadedFiles/wwwpewtrustsorg/Reports/Credit_Cards/PEW-CreditCard FINAL.PDF

WhiteHouse.gov

whitehouse.gov/the_press_office/Fact-Sheet-Reforms-to-Protect-American-Credit-Card-Holders/

Shop around for a better credit card than this

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